Netflix slides 7% as move to end sharing user count sparks growth worries

"Investors like transparency and the market has judged Netflix on its subscriber success ever since it has been on the stock market," said Russ Mould, investment director at AJ Bell.

"To many, it is a valuable metric and hiding it comes at a time when many people are wondering if Netflix has reached maturity in many regions."

Netflix added new customers in the first quarter, but its second-quarter revenue forecast missed market expectations of $9.54 billion late on Thursday. It also decided not to report subscriber additions and average revenue per member from the first quarter of 2025.

"While this is partially a sign of Netflix's unrivaled market share, it also raises questions about the streamer's ultimate ceiling in the current landscape," said Brandon Katz, entertainment industry strategist for Parrot Analytics.

Netflix's stock fell 6.5% to $570.34 in early trading and if losses hold, its market valuation was set to fall over $17 billion to about $247 billion.

The slide also weighed on the shares of peers Roku and Walt Disney, which fell 1.5% and 1.2%, respectively.

Other technology companies such as Meta's Facebook and social platform X too had earlier stopped reporting monthly active users as growth slowed.

For Netflix, investors will also keep a close watch on how sustainable is its paid sharing initiatives, Goldman Sachs analysts said, while the removal of crucial metrics will add to the debate.

On the brighter side, Wedbush analyst Alicia Reese said competitors are likely to continue to struggle in their effort to replace Netflix's business model, thanks to its "insurmountable lead".

Netflix said its ad-supported streaming plans helped attract 9.3 million new customers, nearly double the consensus forecast of analysts polled by LSEG, bringing the global tally to 269.6 million at the end of March.

"The bigger question now will be how Netflix continues to keep churn to a minimum, when rivals catch up with their own cheaper plans," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.